Iowa Supreme Court upholds Pottawattamie County pre-nup agreement

The Iowa Supreme Court has ruled for the first time on a prenuptial agreement. Randall and Teresa Shanks of Council Bluffs were to be married in Jamaica on April 23, 1998. Randall was a successful attorney and Teresa had degrees in court reporting and marketing and had worked in the marketing department of a casino.

While discussing marriage, Randall said he wanted to preserve assets for his children from another marriage in the event he died or got a divorce, and suggested a premarital agreement. Teresa agreed, stating she was not marrying Randall for his money. Randall wrote the prenuptial agreement and presented it to her 10 days before the wedding with the advice she have an attorney look it over.

Teresa consulted a friend, who referred her to an attorney licensed only in Nebraska. The attorney did not know Teresa was from Iowa when she agreed to look over the agreement and after doing so, made suggestions that included having Teresa consult with an Iowa lawyer. Teresa made changes based on that lawyer’s advice, but did not seek help from an Iowa attorney, even after Randall again suggested it. She signed the agreement and the two were married, but six years later Randall filed for a divorce.

Teresa sought to prevent enforcement of the prenuptial agreement saying it was unenforceable since Randall had more legal experience and she had not fully understood its consequences. The district court ruled in Pottawattamie County ruled Teresa’s favor and the appeals court upheld that ruling.

But the Iowa Supreme Court ruled that although Randall Shanks’ vastly superior legal knowledge and stronger financial position posed a danger that such advantages would be abused, they found we find no abuse occurred in this case. The high court says Teresa’s choice not to seek the advice of a lawyer licensed to practice law in the state of Iowa was not the product of any unconscionable conduct or tactic of Randall. The Supreme Court has sent the case back to the district court to rule on the divorce settlement using the premarital agreement.